Chapter 32. Using Solver for Capital Budgeting

Question answered in this chapter:

  • How can a company use Solver to determine which projects it should undertake?

Each year, a company like Eli Lilly needs to determine which drugs to develop; a company like Microsoft, which software programs to develop; a company like Proctor & Gamble, which new consumer products to develop. The Solver in Microsoft Excel 2010 can help a company make these decisions.

Answer to This Chapter’s Question

How can a company use Solver to determine which projects it should undertake?

Most corporations want to undertake projects that contribute the greatest net present value (NPV), subject to limited resources (usually capital and labor). Let’s say that a software development company ...

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